Graduate and Professional Student PLUS (Grad PLUS) Loan operates in similar fashion to the Parent PLUS Loan – as a low-cost supplement to borrow for college.
The same terms and conditions applicable to PLUS Loans for parents also apply to PLUS Loans for graduate and professional students:
- a fixed interest rate of 6.28%.
- No adverse credit history in the last 90 days.
- borrow up to the cost of attendance minus all other financial assistance.
- Not subsidized; interest accrues during all periods.
Grad PLUS loans are actually made to the students, not the parents. In other words, repayment is the responsibility of the student who applies for the loan. This differs from Parent PLUS Loans, which are the responsibility of the parents.
The first step in the application process is to complete the Free Application for Federal Student Aid. The FAFSA is a requirement to borrow from the Grad PLUS Loan program or any other federal loan programs.
Most schools require you to apply for a Direct PLUS Loan online at StudentLoans.gov. You will use the same FSA ID used to sign your FAFSA to apply for your Grad PLUS Loan.
If your initial credit check is approved, you’ll receive an approval letter that looks like this or this if you do not pass the credit check due to your credit history.
If you have less than average credit history, you may still receive a PLUS Loan if you can secure a creditworthy co-signer. A co-signer is someone who agrees to repay the loan if you fail to repay it.
Once you are eligible for a Grad PLUS loan, you will be required to sign a Direct PLUS Loan Master Promissory Note (MPN), agreeing to the terms of the loan.
Grad PLUS Loan FAQ #
How much can you borrow on a Direct PLUS Loan? #
To calculate the maximum PLUS eligibility, take your annual cost of attendance (COA) — which includes tuition, fees, books, and living costs — and subtract out any other financial aid you receive such as grants, or Stafford loans.
For example, if your cost of attendance (COA) is $10,000 and you receive $5,000 in other financial aid, you could borrow as much as $5,000 through the PLUS Loan.
What is the Grad PLUS loan interest rate? #
The interest rate is fixed annually at 6.28%, plus up-front fees of up to 4.228% of the amount borrowed. Fees are deducted from each loan disbursement.
The repayment period for a Graduate PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement.
Do Grad PLUS loans have a grace period? #
There is no “grace period” for PLUS loans. Generally, you’ll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose.
To help you decide which option is best suited for you, here is a simplified guide to different repayment plans for federal student loans — each with its own pros and cons.
How do I consolidate PLUS loans? #
Unlike Parent PLUS loan, the Grad PLUS can be consolidated with other education loans for which you are the borrower, such as the Stafford and Perkins loans into one new loan held by a single lender.
One key benefit of loan consolidation is that it simplifies the repayment process by replacing multiple payments on multiple loans with a single monthly payment. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years.
However, keep in mind that consolidating your loan may make your loan more manageable and easier to repay, but it will also increase the term of the loan and the total interest paid over the lifetime of the loan.